Tuesday, March 14, 2017

SABC facing a new cash crisis as the struggling South African public broadcaster's cash reserves keeps dropping; now far below R650 million threshold.

The SABC is once again facing a calamitous cash crisis, similar to the one in 2009 that brought the SABC to the brink of financial collapse with the broadcaster's cash reserves that fell to a shockingly low R174 million by the end of December 2016.

Business Day on Monday reported about a SABC treasury risk committee report of January 2017 warning that the beleaguered SABC, constantly lurching from crisis to crisis, is once again facing a finance nightmare.

The SABC's money woes became so bad in 2009 that it got a government bail-out in the form of a government-guaranteed Nedbank bank loan of R1.4 billion.

Now SABC insiders are warning that the public broadcaster is once again approaching a depleted cash reserves cliff that could see the struggling South African Broadcasting Corporation again needing yet another possible government bail-out.

According to the SABC's treasury risk report, the SABC is once again delaying payment to some suppliers to keep some cash in the bank for longer. 

The SABC’s liquidity requirement is R650 million per month – the amount of money the SABC is supposed to keep in the kitty as its cash balance in order to remain operational.

By December 2016 this has plunged to just R174 million, with Business Day reporting on the treasury report warning that the SABC could soon be facing a cash deficit of over R1 billion if the public broadcaster's current spending levels continue.

Things like the use of consultants and the former SABC COO Hlaudi Motsoeneng's unilaterally implemented plan for 90% local content and 80% local TV content on SABC3 in July 2016 has had a disastrous impact on the SABC – sucking up money in production spending as ratings fell.

As cash went out to pay for productions, viewers and advertisers on the other hand have fled, causing SABC revenues to plummet the past few months.

At the end of February the SABC’s acting CEO James Aguma told parliament that the SABC's financial performance was "satisfactory".

James Aguma revealed the shambles of the SABC's TV licence department that has written off R17.7 billion in outstanding TV licence fees due to its "corrupt database". 

James Aguma also revealed that the SABC has run specific TV licence checks on members of parliament to see which parliamentarians are paying SABC TV licences.